NY 2nd Month Sugar Futures
NY sugar futures rallied on Friday as protracted buying pressure triggered a close on the front foot above 19.00 at 19.16. The %K/%D is rising and diverging further into the overbought. The MACD diff is positive and diverging. On the upside, a break above 19.21 – a December high - could trigger gains through 19.50, which is where the 100 DMA is. On the downside, a break back below the 19.00 support level could trigger losses back towards 10 DMA at 18.26 to confirm the outlook for lower prices in the longer term. We believe that prices will remain above 19.00 today, and a break above 19.21 could help form the three white soldiers’ formation – a strong buy signal.
Ldn 2nd Month Sugar Futures
Ldn sugar futures gapped lower on Friday but consolidated during the day, retesting resistance at 520 and closing above it at 521.40. The %K/%D is seen converging on the downside in the overbought. The MACD diff is positive and converging, suggesting growing selling pressure. The indicators point to lower prices in the near term, and to confirm the rejection of the support, prices need to take out the 10 DMA at 512.27. A break below this level towards the 40 DMA at 502.39 could confirm a trend change. Conversely, appetite for prices back above the 525 could trigger a test of recent resistance at 530; tertiary resistance stands at the 100 DMA at 538.75. While the indicators point to growing selling pressures, the 10 DMA support is holding firm. Prices would first need to break below this level to confirm the change of trend.
NY 2nd Month Coffee Futures
Prices weakened on Friday as moderate selling pressure triggered a close above the 400 support level; the market closed at 407.20. The stochastics are falling, with the %K/%D converging on the downside in the overbought, as the MACD diff is positive and converging. A longer candle body with a long downside wick suggests that markets are rejecting prices below the 400 level in the meantime. To suggest further gains, futures must break above the trendline of 430 before targeting new highs at 450. Alternatively, the 400 level is robust, and a break below could signal a potential change in trend. We expect prices to test but maintain support at 400 today.
Ldn 2nd Month Coffee Futures
Ldn coffee futures edged lower on Friday as prices continued to trace support at the 10 DMA level; the market closed just above this level at 5726. The stochastics are pointing to growing selling pressures, with %K/%D converging on the downside, and the MACD diff is positive and converging, outlining the recent decline in prices. The reaffirmation of support above 10 DMA could trigger gains back towards the 5800 level and the upper regression channel at 6000. In the long run, this resistance needs to be broken to help accelerate upside conviction. Conversely, a breach of support at 10 DMA may set the scene for lower prices to 5569. If futures take out of this level, this could reaffirm the trend change on the downside. We expect prices to retest the 10 DMA support but hold above it today.
NY 2nd Month Cocoa Futures
NY cocoa futures opened higher on Friday, but resistance at 40 DMA caused futures to close lower on the day at 10325. The stochastics have just crossed on the upside and are now rising, a strong buy signal and the MACD diff is negative and converging. On the downside, a break of 10260 could trigger losses through 10000 – a robust support level. On the upside, a break above the 40 DMA at 10698 could set the scene for bullish momentum towards 10779. The candle closing lower on the day could be a sign that futures found robust resistance at 40 DMA; however, the indicators point to accelerating upside momentum. To confirm this, this level has to be taken out first.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures opened higher on Friday, but resistance of 8294 caused futures to close lower on the day at 8139. The stochastics are seen diverging on the upside, with the %K/%D now rising higher out of the oversold. The MACD diff is negative and converging. A break of the 8000 level could trigger losses through 7820, with the tertiary level at 7348. On the upside, a break above the 10 DMA at 8265 could set the scene for bullish momentum towards the 40 DMA at 8603. A candle with a longer upper wick has been formed, which points to market indecisiveness about higher prices, and to confirm the indicators’ momentum on the upside, futures have to take out the 10 DMA level.
